The current corporate tax rate applicable in Kenya is 30% in the case of resident corporations (i.e. limited liability companies). A non-resident company with a permanent establishment in Kenya is taxed at 37.5%. The tax is computed on the taxable income of a company, having deducted expenses which are wholly and exclusively incurred in the production of income.
Other applicable taxes are:
- Turnover tax (TOT) at 1% for micro, small and medium enterprises whose annual turnover does not exceed KES 50,000 per annum.
- 1% minimum tax for all businesses whether making profits or not. Those whose tax from profits exceed the computed minimum tax will not be liable for this tax.
- Capital gains tax- 5% of net gain.
For any other businesses owned by individuals directly or through transparent entities e.g. partnerships, the individuals are taxed on individual tax rates. The individual tax rates are based on a graduated scale ranging from 10% to 30%(see under individual taxation). Monthly income in excess of Kshs. 57,333 earned by an individual would be subject to tax at the highest bracket on the graduated scale (i.e. 30%).
All the non Resident entities are taxed through withholding tax regime.